Standing Committee D

[Dame Marion Roe in the Chair]

Serious Organised Crime and Police Bill

Clause 69 - Financial reporting orders: making

Amendment moved [this day]: No. 201, in clause 69, page 40, line 14, leave out 'a magistrates' court or'.—[Mr. Djanogly.] 
Question again proposed, That the amendment be made.

Marion Roe: I remind the Committee that with this we are taking the following amendments: No. 202, in clause 69, page 40, line 39, leave out subsection (6).
No. 203, in clause 70, page 41, line 2, leave out from first 'the' to 'Court'. 
No. 204, in clause 70, page 41, line 18, leave out subsection (6).

Jonathan Djanogly: This important issue, which I am sure all hon. Members will recollect, is not, unfortunately, addressed in the Bill. Basically, the Bill gives the courts the right to do whatever they like within a five to 20-year period for Crown courts and a five-year period for magistrates courts. That power needs to be further curtailed, even within the context of the list of offences in the clause.
I appreciate that it is a difficult issue. If someone is found guilty of obtaining property by deception, for instance, that does not necessarily mean that the amounts involved were significant. If very small sums were involved, a financial reporting order may be suitable for only a very short time, and it is questionable whether it would be suitable at all. Parliament should take more responsibility on this and the amendments set out our suggestions on how to go about that. 
We have avoided formulae, or different terms for different crimes. Rather, we have looked at the court involved in the process, while bearing in mind that the Bill is meant to be about serious crimes. If the crime is dealt with by a magistrates court, where sentences must be for less than one year, the court should not have the right to issue financial reporting orders. Indeed, in deciding whether to send the case to a higher court, magistrates should bear in mind the likelihood that an order will have to be issued. Such orders are likely to be fairly difficult to get right, and one has to wonder whether the average magistrates court has the expertise to judge them. I should have thought that such things belonged in a Crown court. 
Finally, there is the question of the practicalities. At present, the accused is asked before sentencing in a magistrates court to fill in a form outlining his income and expenses. In the real world, however, such forms are usually filled in lightly and in a rather haphazard  way. For the most part, that does not really matter, because the vast majority of fines in a magistrates court will be minor. Indeed, that is the whole purpose of magistrates courts, which can hand out quick and cheap justice for mainly minor crimes. Introducing the concept of considering future finances could well be an administrative nightmare for the average magistrates court. For that reason, we have tabled the amendments.

David Heath: I have some sympathy with the amendments, and I had intended to raise the issue in the clause stand part debate. I have no problem with the principle behind the financial reporting order procedure that the Government propose. The order is a potentially useful tool, but it is also a very substantial and potentially intrusive tool as far as an individual's privacy is concerned. It must be proportionate to the crime of which that person has been convicted.
The danger does not lie in the application of such orders by the Crown court, and we can be reasonably assured that the level of offence involved and the consideration given in such courts will be appropriate. Without in any way denigrating the powers or the responsibility of magistrates courts, however, the offences that are usually tried before them—irrespective of whether such offences fall within those listed in subsection (3)—are not such that one would normally consider a financial reporting order to be commensurate. There is a real issue of proportionality. The Minister may be able to convince me that there is a need for magistrates to have this power, but we need to hear that argument. 
The same, of course, applies in Scotland. I think that the amendment to clause 70 tabled by the hon. Member for Huntingdon (Mr. Djanogly) is slightly defective in its phrasing, but nevertheless exactly the same arguments apply to the sheriff in Scotland, in relation to the level of criminality that is the subject of the trial. 
Mr. Tony McWalter (Hemel Hempstead) (Lab/Co-op) rose—

David Heath: I give way to the hon. Gentleman because he is such good value.

Tony McWalter: I want to have just one more go without being slagged off, as I was this morning. It is obvious that a relatively trivial offence is sometimes the tip of an iceberg and creates a suspicion that the fact that a person has been caught with his hand in the till is not a one-off but part of a sophisticated operation that merits the name ''serious organised crime''. It is that suspicion that precipitates the provision that we are considering. Does not the hon. Gentleman understand that that is exactly what is needed to get to grips with what is happening in organised crime?

David Heath: Even if I thought that ''slagging off'' was a parliamentary term, I am sure that I would never have applied it to the hon. Gentleman, but I understand his point: a process of investigation of serious crime often starts from a small beginning. However, he must understand that the penalty for someone else's major offence cannot be imposed on a  minor offender. The person who, in his example, has inadvertently been trapped in a web of crime is the person who will be subject to a financial reporting order. That is where the proportionality issue arises. We may hear arguments from the Minister explaining why that should be, but I want him to consider whether, even in the instance suggested, the reporting order is appropriate to the level of criminality of the individual to whom it is applied.
That is the crux of the issue. We are not talking about Mr. Big making a report on his financial transactions, which would achieve exactly what the hon. Gentleman wants. We are talking about Mr. Little, who has been convicted of a minor crime, for which he may not even have received a custodial sentence, being required to fulfil the onerous responsibility of financial reporting on all his transactions for many years. We should think seriously about that when it concerns someone who has been convicted of a minor offence.

Jonathan Djanogly: The hon. Member for Hemel Hempstead (Mr. McWalter) made a fair point, but in the example that he suggested, the magistrates court would refer the minor issue to the Crown court. It is a fair point. It does happen that small issues arise with important consequences. In that instance, the matter would be referred to the Crown court, so the issue remains valid.

David Heath: That is a helpful intervention, and the hon. Gentleman is right. The court level at which a case is heard is a rough and ready guide to the severity and importance of the offence.
Mr. McWalter indicated dissent.

David Heath: The hon. Gentleman shakes his head, but I shall not slag him off; I simply express disagreement with him.

Vera Baird: I should not have thought that anyone would want what the hon. Member for Huntingdon (Mr. Djanogly) recommends: the committal of cases that do not merit the attention of the Crown court for the sole purpose of ensuring that the power in question is available. That would just clog up expensive state apparatus unnecessarily. On the other hand, if magistrates courts were prevented from using the procedure, and never became aware of its availability, people could elect to be tried in the magistrates court for relatively serious offences to avoid such an order.
If there really is a need for some procedure, and if the magistrates themselves think there is a need for such an order, my best suggestion is that there should be a power to commit after conviction. The Crown court could then be the agent which puts it in place. However, as the magistrates will start to be trained quite soon by the Judicial Studies Board, I would have thought that the board could lay down guidance and the magistrates could be trusted with it.

David Heath: I am grateful to the hon. and learned Lady. I see some merit in the mechanism that she describes, although she then suggests that its apparatus might be too cumbersome to ensure that it would only be used sparingly and with good reason.  The last thing I want is to suggest that the magistracy is incapable of making appropriate decisions. We have to be wary of what is a substantial intrusion when added to the sentence already placed on the individual concerned. We need, and the court needs, to be assured that the severity of that additional penalty is appropriate to the offence committed and the offences that the court holds to be in danger of being committed later. That is what the Minister has to persuade us of.

Dominic Grieve: I am sorry that I missed the start of the debate this morning. I am conscious that the probing amendments were, perhaps, the result of my perusing the amendment paper and putting them forward for consideration. I was particularly struck by a remark by the hon. Member for Hemel Hempstead.
The Minister may be able to help me, but I have always expected that an order of this kind would be made when someone was thought to be participating in a pattern of dishonest activities. Therefore it was, as much as anything else, intended as a control mechanism against future reoffending. If it is to be applied to a small, insignificant offender whom the prosecutor thinks may be part of a wider web of criminal and dishonest conduct, nothing is more likely to alert that person to having to make alternative financial arrangements than to be told in court that, every three months, he would have to produce his documents and report to somebody. That made me begin to wonder whether it was ever likely that a magistrates court case would come into this category. 
People are going to make alternative arrangements. I thought that the measure was a way of suppressing nexus crime. Having arrested someone, knowing full well that they have a serious criminal lifestyle—heaven knows we debated this at great length in the Proceeds of Crime Bill—we would want to impose a sanction that their financial affairs would be closely scrutinised in future. I did not see it as a way of unearthing something down the line, since most people will make alternative arrangements when faced with such an order if they want to continue being dishonest. They will also try to conceal those arrangements from the investigators. Of course they may be caught, but they can certainly attempt it, which is why I took that view. 
I am mindful of what the hon. and learned Member for Redcar (Vera Baird) said about not wanting to have too many committals to the Crown court. That is certainly a powerful argument, and it might be worth considering whether committal could only take place at the Crown court for the specific purpose of imposing such an order. That is likely to impose a greater burden on magistrates. I am sure it is one for which they could cater, but one is left with the slight anxiety that, because it is quite a complicated area, we may start getting orders made in cases which are not strictly necessary. We must face the fact that this is an onerous sanction. 
In the past 24 hours, we have been reminded that criminals have rights. I do not disagree with that view, and we must ensure that whatever we do is proportionate.

Caroline Flint: One reason why we do not support the amendment, which would mean that financial reporting orders could not be applied at magistrates court level, is that some offenders, convicted by a magistrates court of one of the specified offences, will pose a higher risk of reoffending. For those people, an order would be appropriate. As we discussed, some of the specified offences, such as offences under the Theft Act 1978 and intellectual property offences, can be tried either way. There is no reason why a magistrates court should not have the power to impose those sentences.
I agree with my hon. and learned Friend the Member for Redcar that we do not want to create the ridiculous situation in which either the Crown court is clogged up with cases or people are choosing to be tried in a magistrates court and therefore finding another loophole in the proceedings. An offender convicted by a magistrates court of obtaining services by deception under section 1 of the Theft Act could pose a sufficient risk of reoffending for the court to believe that imposing a financial reporting order on him was justified. 
It is a basic principle of sentencing that the sentence must be proportionate. I have listened to hon. Members, but magistrates courts and the Crown court are capable of exercising this responsibility. Magistrates courts, magistrates and those who work alongside them are considering different ways of deterring future offending, which in some cases involves containing people who are considered a risk to the community. That might involve securing drug treatment for people. There are many different creative, and hopefully effective, ways in which magistrates can think beyond simply imposing fines or custodial sentences when they deal with individual cases. We are confident that magistrates will not use the powers in cases in which they are inappropriate. In any case, the prosecutor will be the one who requests the financial reporting orders. 
However, there are issues to be addressed, to which the hon. Member for Beaconsfield (Mr. Grieve) referred. We are trying to determine whether financial reporting orders can work on several different fronts. One would hope that they will act as a deterrent against future offending behaviour, although it is undeniable that people may on occasion be tempted back into offending and that mistakes will be made. However, these financial reports contain information that could be important. 
As we discussed earlier, the reports may keep people from using legitimate financial institutions to organise their criminal activity. If they act as a deterrent, provide intelligence, disrupt criminal activity or keep criminal activity away from legal enterprises, they are no bad thing.

Jonathan Djanogly: Having heard the Minister's answer, I am not entirely convinced that leaving things as they are will lead to the clause being either proportionate or administratively realistic. I know that doubts were expressed as to whether magistrates would commit on  the basis that they might not know about the availability of the orders, but I assume that the prosecution would have reminded the court at the time, so I cannot imagine them being forgotten about.
We do not, however, intend to take the matter further at the moment, and I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Clause 69 ordered to stand part of the Bill.

Clause 70 - Financial reporting orders: making in Scotland

Question proposed, That the clause stand part of the Bill.

David Heath: I am not familiar with Scots law—the Minister probably is not either—but the list of offences under subsection (3) looks uncommonly short. Does it encompass the same areas in law as that which applies in England and Wales?

Caroline Flint: I shall ensure that the hon. Gentleman receives the precise answer to that question. The Scottish offences with which the clause is concerned are the equivalent of those in England and Wales—it says here.
Question put and agreed to. 
Clause 70 ordered to stand part of the Bill.

Clause 71 - Financial reporting orders: effect

Question proposed, That the clause stand part of the Bill.

Jonathan Djanogly: I wish to raise an information point. The clause does not specify that financial reporting orders are to start at the end of the custodial sentence, even though that was the position set out in the White Paper. I raise the point noting that Liberty questions whether offenders in prison would be able to comply with the requirements of an order.
I shall be interested to hear the Minister's views. I think that, given that the Bill deals with serious organised crime, the provision is right and that it should be possible to place an FRO on a Mr. Big in prison, on the grounds that he could be running a drugs empire from prison. However, compliance might not be possible for the small criminal in prison who does not have an accountant. Considering the Minister's reluctance, under previous amendments, to address the question of limiting FROs to serious cases, the point perhaps becomes more relevant. 
Could the Minister also look again at subsection (10)? Is the threat of an extra maximum of 51 weeks in prison enough of an incentive to ensure compliance with an FRO by a big criminal who has earned millions of pounds from illegal activity?

Caroline Flint: Our view, after some discussion, is that people in prison do manage to continue to oversee their financial activities in a number of ways. They may not have an accountant, but they have visits from family members and others. Considering the range of people who may be affected by a financial reporting  order, it is important to recognise that someone outside prison could squirrel away a huge amount of money, or transfer assets or put them in someone else's name, in order to continue the business in another form. We did not want to lose an opportunity to deal with that. I am glad to hear that in principle the hon. Gentleman sees merit in that argument.
On subsection (10), we have taken advice on a number of provisions in the Bill covering such offences such as, for instance, people not complying with disclosure orders or giving incorrect information. Subsection (10) was drafted after consultation with a number of different people, so I shall write to the hon. Gentleman to explain why we felt that it was appropriate.

David Heath: Presumably, under subsection (10) the offence and the sentence can be applied each time a report is required. Therefore, a person in prison who continually fails to make their financial records available will simply stay in prison for a long time.

Caroline Flint: That sounds entirely logical. If people in prison do not comply with such a requirement for action, that would have to be looked into in terms of their prison sentence. As I said, I shall clarify the issue. However, if someone receives a prison sentence and is then given a financial reporting order with which they do not comply, that is a different offence. We have to be clear. I do not want to confuse matters, but I am happy to clarify that in a letter.

Dominic Grieve: I think that I understand what the Minister means. For a moment, it seemed she was suggesting that a person who did not comply with a reporting order would stay in prison for longer but on the existing sentence. I do not think that can be right. I want to clear it up, because I do not think that that is what the hon. Lady intended to say.

Caroline Flint: No, that is not what I meant. Obviously, the courts would impose a prison sentence and a financial reporting order, but the penalty for not complying with the reporting order is an add-on. I will write to both hon. Gentlemen to clarify that point a little further.

Vera Baird: It is a small point, but the hon. Member for Huntingdon is conjuring with the notion of someone who does not have the resources to make a return. One defence to the charge of not making a return is reasonable excuse. That may offer some reassurance.

Caroline Flint: I am indebted to my hon. and learned Friend's expertise.

Jonathan Djanogly: I was not suggesting a defence of being unable to comply. I was simply questioning whether it is fair that a small criminal, who does not have the resources of big criminals, should have to make such a report. Can they physically do it? The Minister said that they have researched the point and that the answer is yes. I am happy to accept that, but it is a slightly different issue.
Question put and agreed to. 
Clause 71 ordered to stand part of the Bill.

Clause 72 - Financial reporting orders: variation and revocation

Dominic Grieve: I beg to move amendment No. 205, in clause 72, page 42, line 15, leave out 'convicted' and insert 'sentenced'.
This is a probing amendment. I am a little puzzled by subsection (3), which states: 
''if the order was made on appeal, the application must be made to the court which originally convicted the person in respect of whom the order was made.''
Surely the application needs to be made to the court that originally sentenced the person: the convicting court and the sentencing court will not necessarily be one and the same. It would be most undesirable if a person convicted in the magistrates court and committed to the Crown court for sentence ended up back in the magistrates court. It seems desirable, if possible, that the judge who originally imposed the sentence should hear the case. I would be glad to hear whether the Minister thinks that there is any substance in my proposal.

Caroline Flint: I have some sympathy with the hon. Gentleman's proposal. He is right to point out that offenders are not always sentenced by the same court that convicted them. We are considering tabling some amendments dealing with the use of financial reporting orders in Northern Ireland, and I will consider whether the present area could be better informed as well. On that basis, I ask him to withdraw the amendment.

Dominic Grieve: I am grateful to the Minister. I am pleased that scrutiny in Committee is doing what it is supposed to be doing. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Question proposed, That the clause stand part of the Bill.

Jonathan Djanogly: Briefly, the clause provides for the variation or revocation of an FRO. The criminal who is reporting can make such an application, but how many times will an offender be able to make such an application? In effect, it is an appeal. We would not want the courts clogged up with people appealing repeatedly against an FRO. Could the Crown be awarded costs in respect of an offender's failed appeal?

Caroline Flint: If the hon. Gentleman will bear with me, I shall write to him. He makes a good point. We do not want mischievous appeals, and we need some sort of operational structure, both for those who have to comply with FROs and for those who need to vary them, such as probation officers and others. I shall get some details about that. I told that it is a matter for the rules of the court, but I shall consider the matter.
Question put and agreed to. 
Clause 72 ordered to stand part of the Bill.

Clause 73 - Financial reporting orders:

Dominic Grieve: I beg to move amendment No. 206, in clause 73, page 42, line 25, at end insert
'but he must inform the person in respect of whom an order was made that he has disclosed a report and to whom he has disclosed it.'. 
The clause deals with the verification and disclosure of financial reporting orders. I accept that for the system to work, it must be possible for those examining the orders to check that what they are being told by the defendant—the convicted criminal who is under an obligation to provide the information—is accurate. However, there does not seem to be any suggestion in the clause that the person about whom questions are being asked will know who is being approached. The Minister might argue that there are compelling reasons why that should be the case, but there can be little doubt that that is a considerable intrusion on completely legitimate private relationships. 
Let us take the example of an individual who has been convicted but is now going straight. At regular intervals, he presents his bank statements or statements from his employer, and the officer or investigator speaks to his bank manager or employer about it. That has the capacity to cause considerable damage to those private relationships. I have a horrible feeling that in some cases it could lead to a person losing his job if it had not been known that an FRO was in force. What is the justification for not informing somebody who is providing information in respect of an FRO that contact has been made with certain people to check it? In the ordinary course of events, I would expect a person to be entitled to that information. The Minister might persuade me that in the particular circumstances of an FRO, it would not be right to do it, because if an irregularity were shown up, the investigator might want to investigate other matters. 
However, there might be a halfway house. There could be a discretion not to inform if it were considered that there had been some impropriety, but to inform if everything were shown by the checks to be all right. I have not sought to tackle that position in the amendment, but I have an anxiety about a situation in which information is obtained from the defendant and is checked behind his back with individuals with whom he has private or commercial relations, while he is kept completely in the dark that those contacts have taken place. That could cause considerable damage in the case of somebody who is trying to lead a law-abiding life. It is a difficult matter to reconcile, but I should be grateful to hear from the Minister how the Government view the issue.

Caroline Flint: As has been outlined, the amendment would require the person receiving financial reports to inform the subject of them every time a report was disclosed. That would provide the subject with a complete list of the enforcement agencies that were taking an interest in his  potentially illegal financial affairs, as well as any third parties who had been asked to provide verification of the information in the report.
I acknowledge that this is a difficult area. One problem is that investigations could be prejudiced and third parties put at risk of intimidation in the course of verification of information. The other is that the probation service—as the go-between—could gain an unnecessary bureaucratic burden. However, it is important that the individual to whom an FRO is attached is fully aware of how the information might be used, and who might have access to it. In that situation, it is right that we issue guidance so that those who are subject to the orders are left in no doubt about what the content of the reports will potentially be used for and by which agencies. We believe that the drawbacks of the amendment outweigh the benefits, and we think that it would create an over-bureaucratic process. I ask the hon. Gentleman not to press his amendment.

Dominic Grieve: I am grateful to learn from the Minister that the guidance will cover that concern. Drafting the amendment, I had not thought in terms of someone having to be told that the investigator had shared the information with some other enforcement agency. I was specifically concerned about its capacity to intrude on the private or commercial relations that an individual might have with his bank manager or his employers. Those were the examples that I could think of—there may be others. I do not have a great problem with the sharing of information with Customs and Excise, the security services or whoever else. That does not trouble me. If the guidance is properly drawn up, I suspect that the problem that I have seen can be addressed. In the circumstances, I shall have no hesitation in asking leave to withdraw the amendment.

Caroline Flint: In most circumstances, it is unlikely that an employer will be contacted. I do not want to misdirect the Committee—that may be a possibility in certain circumstances. That is why I made the point about third parties potentially being subject to intimidation. I hope that the guidance will cover some of the issues.

Dominic Grieve: I can see the Minister's point that it might be unusual for an employer to be contacted. I would certainly expect that if a substantial sum of money were to appear in a bank account and the person were to say that they sold their car to someone down the road, the investigator might want to go off and check. If it turns out to be a legitimate transaction, that has the capacity to inform the person down the road of the fact that the person up the road, with whom they thought that they were having perfectly amicable relations, is subject to an FRO. It is one of those matters of balance, but if the guidance is issued so that we do not end up with a situation, as the Minister has rightly appreciated, where people complain that their attempts to go straight have been wrecked by intrusive disclosure of information about their finances when they have done nothing wrong. That is what we have to guard against.
I accept that those who have committed criminal offences and are subject to FROs will have to accept the burden that goes with it. That is just tough.  However, the dividing line that we have to find is that between being tough and being over-tough or unfair. I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Question proposed, That the clause stand part of the Bill.

Vera Baird: I wish to ask the Minister about the references made in a couple of the provisions to a report being made to a ''specified person'' by somebody subject to what we have now slipped happily into calling FROs. Who are the specified people likely to be? Are they likely to be the police, SOCA or the Assets Recovery Agency? To whom is it likely that someone will have to make such a report on an ongoing basis?

Caroline Flint: I think that I am right in saying that the probation officer will act as the person to whom the reports will come, as I mentioned earlier. From that point, access to and information on the reports for intelligence or verification purposes that might be sought by other agencies.
Question put and agreed to. 
Clause 73 ordered to stand part of the Bill. 
Clause 74 ordered to stand part of the Bill.

Schedule 5 - Persons specified for the purposes of section 74

David Heath: I beg to move amendment No. 180, in schedule 5, page 157, line 19, at end insert—
'(1A) A person to whom a disclosure notice has been given under section 56, whether or not information supplied by that person has been or might be used in legal proceedings.'.

Marion Roe: With this it will be convenient to discuss the following: Amendment No. 181, in schedule 5, page 157, line 19, at end insert—
'(1A) A person to whom an immunity notice has been given under section 65, whether or not information supplied by that person has been or might be used in legal proceedings.'. 
Amendment No. 182, in schedule 5, page 157, line 19, at end insert— 
'(1A) A person to whom a restricted use undertaking has been given under section 66, whether or not information supplied by that person has been or might be used in legal proceedings.'. 
Government amendments Nos. 52, 56 and 33.

David Heath: We come now to the persons specified for the purposes of clause 74, which deals with the protection of people involved in investigations or proceedings. I note the clause is not entirely prescriptive, in that subsection (7) allows any other person to be given protection on other grounds, but if we are to protect people involved in criminal investigations or the legal proceedings that follow on from them, the provisions should be as comprehensive as possible.
The three categories of person who might usefully be added to the list in schedule 5 are dealt with in earlier parts of the Bill. They include those who are given immunity, those on whom a disclosure notice has been served to gain information and those to whom a restricted use undertaking has been given in return for the information that they supplied. It might  be argued that they would normally be covered by paragraph (1) of schedule 5, which refers to 
''A person who is or might be, or who has been, a witness in legal proceedings''.
However, they might not fall into that category because the information that they provide is of no evidential value and the investigating authorities consider it unhelpful to the case that is being presented. However, if it is known that a disclosure notice has been served on them, or that they have entered into immunity arrangements or a restricted use undertaking, they may be in considerable danger from somebody against whom legal proceedings will be taken or, indeed, somebody who, up until that point, has not been the subject of proceedings but who is still at large and able to cause mischief. 
The amendment would give a clear sign to people who may or may not give information that is of evidential value. They should be afforded the greatest possible protection if we are to persuade them to enter into the arrangements that the Bill envisages for them. It would therefore be sensible to list them in the schedule as people to whom statutory protection is available and can be afforded by the investigating authorities.

Caroline Flint: We share the hon. Gentleman's concerns. He raised the issue on Second Reading and we had a discussion about it earlier today. We are happy to address those concerns to ensure that persons to whom a disclosure notice has been given are covered by the witness protection provisions. However, the phrase
''whether or not information supplied by that person has been or might be used in legal proceedings''
could lead to confusion. It does not fit well with clauses 56, 65 and 66, because it is not a statutory requirement for the issue of notices under those clauses that the person has supplied information. 
I hope that the hon. Gentleman will accept the reasons that I have outlined. I agree to his amendment in principle, and if he will withdraw it, I shall table my own amendments on Report to address the concerns that he and others have expressed. 
Government amendments Nos. 52 and 56 are an attempt to ensure that we leave out no one we think should be protected.

David Heath: I thank the Minister for those comments. The only reason I proposed that slightly complicated formulation was to differentiate the people I had in mind from those who will already be covered because they might be or have been a witness in legal proceedings. However, I am sure that the Minister can produce a better formulation, and provided that my concerns are dealt with, I shall be entirely content. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Amendments made: No. 52, in schedule 5, page 157, line 29, at end insert— 
'6A (1) A person who is or has been the Director of Public Prosecutions for England and Wales. 
(2) A person who is or has been a member of staff of the Crown Prosecution Service for England and Wales. 
6B (1) A person who is or has been the Director or deputy Director of Public Prosecutions for Northern Ireland. 
(2) A person who is or has been a person appointed under Article 4(3) of the Prosecution of Offences (Northern Ireland) Order 1972 (1972/538 (N.I.1)) to assist the Director of Public Prosecutions for Northern Ireland. 
6C A person who is or has been under the direction and control of the Lord Advocate in the Lord Advocate's capacity as head of the systems of criminal prosecution and investigation of deaths in Scotland. 
6D (1) A person who is or has been the Director of Revenue and Customs Prosecutions. 
(2) A person who is or has been a member of staff of the Revenue and Customs Prosecutions Office.'. 
No. 53, in schedule 5, page 158, line 2, after '(b)', insert 'is or'. 
No. 54, in schedule 5, page 158, line 6, after 'who', insert 'is or'. 
No. 55, in schedule 5, page 158, line 8, after 'who', insert 'is or'. 
No. 56, in schedule 5, page 158, line 19, at end insert— 
'15A (1) A person who is or has been the head of the Civil Recovery Unit, that is to say of the organisation known by that name which acts on behalf of the Scottish Ministers in proceedings under Part 5 of the Proceeds of Crime Act 2002 (c. 29) (civil recovery of the proceeds etc. of unlawful conduct). 
(2) A person who is or has been a member of staff of the Civil Recovery Unit. 
15B (1) A person who is or has been a person appointed by virtue of section 246(1) of the Proceeds of Crime Act 2002 (c. 29) as an interim receiver. 
(2) A person who assists or has assisted an interim receiver so appointed in the exercise of such functions as are mentioned in section 247 of that Act. 
15C (1) A person who is or has been a person appointed by virtue of section 256(1) of the Proceeds of Crime Act 2002 (c. 29) as an interim administrator. 
(2) A person who assists or has assisted an interim administrator so appointed in the exercise of such functions as are mentioned in section 257 of that Act. 
15D (1) A person who is or has been the head of the Financial Crime Unit, that is to say of the organisation known by that name which, among other activities, acts on behalf of the Lord Advocate in proceedings under Part 3 of the Proceeds of Crime Act 2002 (c. 29) (confiscation: Scotland). 
(2) A person who is or has been a member of staff of the Financial Crime Unit.'.—[Caroline Flint.] 
Schedule 5, as amended, agreed to. 
Clause 75 to 78 ordered to stand part of the Bill.

Clause 79 - Defences to liability under section 78

Question proposed, That the clause stand part of the Bill.

David Heath: I want to make what might seem a rather spurious point, which I did not think was worthy of amendment, although I would like the Minister's advice on it. What happens if person P dies? Do the requirements against disclosure die with that  person? If so, P's dependants may find themselves at risk because of information disclosed.
My point is not entirely spurious, as I hope the Minister appreciates. There is no provision covering what happens posthumously to the protected identity of the person. To what degree is there still a duty to ensure that P's identity is not revealed? There could be significant repercussions for the family and acquaintances of that person, not least because the children might discover that their father or mother was not who they thought they were but had a protected identity. That is a hypothetical case, but one that could happen and it might be worth the Department's while to consider it.

Caroline Flint: My understanding is that when someone is put under a witness protection programme the protection needs of their immediate family and the people with whom they share or have shared a household would be assessed too. It would therefore be logical to assume that even if the prime person in the case died, the risk assessment would be made for those others.
I am informed that ''person'' in subsection (3)(b) continues to be associated with P, even though P is dead, therefore protection of that person continues. That is a rather legalistic way of saying what I think I just said. As we set out, close family members and acquaintances who would be part of the protection arrangements will be considered, and that should not be affected by the death of the prime person. There would have to be a risk assessment and, if necessary, protection would have to continue.

David Heath: The Minister is moving a long way towards what I seek. Perhaps it would have been better to raise the issue under clause 80, although the two clauses are related. However, revealing the true identity of a deceased person would not be an offence. Although the other people would retain their protection, the continuing protection of that identity would have ceased, as I read it, under the statute. That is the potential difficulty that I have spotted. As I say, it may be that nothing could occur in reality, but I ask the Minister to consider that point.

Vera Baird: I am just wondering if that is a problem, because there are offences of disclosing information relating to persons assuming new identities. I imagine that an offence would be committed if anything was done that was likely to disclose the identity of the person surviving, which disclosing the deceased person's identity would be likely to do. The person who is associated with the principal prosecution witness, whoever that is, is entitled to a protection order of their own under schedule 5, paragraph 18. For safety's sake they could be given separate orders; it would then be very clear that anyone disclosing the true identity of the dead person would be committing an offence.

Geoffrey Clifton-Brown: I wonder if the Minister's explanation is correct. I do not want to press for a debate on clause 80, but it is relevant to what we are talking about. Subsection (2) states:
''A person (D)''—
that is, a person associated with P— 
''commits an offence if . . . D discloses information which relates to a person (P) who is or has been a protected person''.
I assume that ''has been'' could mean that they are deceased. D also commits an offence if 
''P assumed a new identity in pursuance of arrangements made under section 74(a)''.
I wonder if clause 80 does in fact indicate that if someone dies and their close associate D discloses their identity, D could be committing an offence. Will the Minister comment?

Caroline Flint: With the Committee's agreement, I shall write to hon. Members to clarify this matter.
Question put and agreed to. 
Clause 79 ordered to stand part of the Bill. 
Clause 80 to 82 ordered to stand part of the Bill.

Clause 83 - Transitional provision

Amendment made: No. 32, in clause 83, page 48, line 32, at end add— 
'(8) Subsection (9) applies if— 
(a) at any time before the commencement of section 74, arrangements were made by a person specified in subsection (11), or any person acting with the authority of such a person, for the purpose of protecting a person of a description specified in Schedule 5, and 
(b) functions in relation to the arrangements are, at any time before the end of the period of six months mentioned in subsection (6), exercisable by a protection provider. 
(9) The provision made by subsections (1) to (7) applies in relation to the arrangements as if they had been made by the protection provider. 
(10) Accordingly, if the three conditions mentioned in subsections (3) to (5) are satisfied in relation to the arrangements, they are to be treated, by virtue of subsection (2), as having been made by the protection provider under section 74(1). 
(11) The persons specified in this subsection are— 
(a) the Director General of the National Criminal Intelligence Service; 
(b) the Director General of the National Crime Squad; 
(c) any of the Commissioners of Her Majesty's Customs and Excise.'—[Caroline Flint.] 
Clause 83, as amended, ordered to stand part of the Bill. 
Clause 84 and 85 ordered to stand part of the Bill.

Clause 86 - Interpretation

David Heath: I beg to move amendment No. 183, in clause 86, page 49, line 42, at end insert—
'(d) they have such a relationship to that person that their safety can reasonably be regarded to be at risk'. 
The interpretation is significant, because the clause contains quite a narrow definition of a person associated with another person for the purposes of providing protection. Subsection (4) says: 
''A person is associate with another person if any of the following apply . . . they are members of the same family . . . they live in the same household . . . they have lived in the same household.''
That raises the question of what happens to, say, the fiancé of a protected person, who does not live in the same household, however unfashionable that might seem, who has never lived in the same household and is not a member of the same family but who might be considered to share the same risk, if only as a way of putting pressure on the person in the first instance. A business partner of the protected person might also be considered to share the same risk, but would certainly not be a member of the same family and would not live in the same household or fall into any of the categories that have been mentioned. There is a gaping hole in the provisions in relation to people who are closely associated. I am not in the business of extending the protection measures to large groups of people; that is not appropriate. However, I want to ensure that we provide properly for people who are closely connected with a person who is at risk and who share that risk. That is the intention of the amendment, which I think is self-explanatory. I do not believe that the category of person that I have mentioned is identified within the clause as it stands.

Caroline Flint: The hon. Gentleman has hit the nail on the head. Countless people could, in one way or another, be held to have a close association with an individual to whom witness protection arrangements apply. Wherever we draw the line, it will be difficult. That is why we felt that, in the context of the statutory duty in relation to witness protection, the category that we have identified—members of the same family who live in the same household or who have lived in the same household—was as wide as we could draw it. Our provisions limit to those whom we feel to be at most obvious or immediate risk the circle of people whom the police can by default include in protection arrangements. We acknowledge that others with a relationship to the protected person might in some circumstances reasonably be regarded as at risk. However, there are other ways in which the needs of such people can be dealt with by the police outside the statutory scheme, consideration being given on a case-by-case basis to the degree of risk that they face.
The statutory scheme as outlined in the Bill is broad. We need to think about the limits that we set to it, which do not necessarily mean that the examples that the hon. Gentleman has given could not be dealt with. The issue is sensitive and it is difficult to know where to draw the line. However, we feel that we have drawn it as wide as possible while leaving some flexibility to consider other individuals, either in their own right or in terms of their association with a protected person. I hope that that satisfies the hon. Gentleman.

Claire Ward: Can I assume from the way in which the Bill is drafted that it would not cover people who are protected or living under new identities not because they are witnesses but because they have been defendants?

Caroline Flint: My understanding is that if somebody has been a defendant and—going back to our earlier discussion—has provided evidence that has helped to convict other criminals, there might be issues about his future protection. If I have not understood my hon. Friend correctly, she might like to ask the  question again. If she is talking about a defendant having rights to protection under the scheme, we might have to protect individuals who have been involved in crime. For example, if they have given Queen's evidence or have immunity and have helped to convict others, there could be issues about their protection.

Claire Ward: I can understand the circumstances that the Minister describes. For example, Maxine Carr is a defendant, convicted, and now under police protection with a new identity. She might well have been a witness in relation to Ian Huntley or in other circumstances. In a case such as that, I would assume that no protection would apply. Can the Minister confirm my interpretation?

Caroline Flint: I can assure my hon. Friend that the provisions would not apply to released convicted offenders such as Maxine Carr or Thompson and Venables, whose case was also widely publicly discussed. They are meant to protect witnesses of crimes and other individuals who are assisting the criminal justice system, not offenders. Our principal aim is to encourage members of the public to come forward and to support them. It is inevitable that some witnesses will have been involved in criminal activity, but they and the other categories of people to be covered will be at risk from the criminals against whom the case is made. That is entirely different from the cases of Maxine Carr or Thompson and Venables, and no one should see the provision as something that would encompass those individuals.

David Heath: I am grateful to the Minister for her reply. She takes these matters extremely seriously, as do I. I understand that we need to draw a line somewhere, but I do not think that the definition is right at the moment. It does not seem sensible that under the scheme, statutory protection could be given to someone who, 20 years ago, was a flatmate of the principal in the case but not to the person whom the principal intends to marry in three weeks' time.

Caroline Flint: I want to clarify one of the issues about people who have lived in the same household. We placed that in the Bill not so much to cover flatmates from 20 years ago, but ex-husbands and wives—for example, the ex-wife of a protected person who may be living with the children from that relationship at another address but had shared a household with the protected person. We were trying to identify close relationships. I hasten to add that we did not want to identify only relationships based on marriage or, for that matter, only heterosexual relationships, which is why the provision refers to sharing a household.

David Heath: I understand that. However, I still find it odd that an estranged husband or wife seems to have a higher level of protection under the clause than a current fiancé or fiancée. That does not seem to make sense. The provision still contains a lacuna.

Dominic Grieve: I had taken the assumption—although perhaps I am wrong—that the category of person  described by the hon. Gentleman would still be eligible for police protection if it were thought that he or she might be subject to any sort of crime of any kind. That would apply irrespective of clause 74. That was why I was fairly relaxed about the matter. If I am wrong about that, the Minister will doubtless intervene and tell me or the hon. Gentleman.

David Heath: The hon. Gentleman is clearly right. There is nothing to stop the police from providing protection. The point is that that protection will not have the support of the ancillary clauses in the Bill that provide for it to be an offence to reveal identities and the various measures that would provide statutory support for that protection. I am suggesting only that anyone who is in a close relationship, whatever it may be, with the individual who is the principal person protected is entitled to consideration for statutory protection rather than for the police protection that would, I am sure, be available in those circumstances. It seems a rather arbitrary cut-off point that specifically excludes the people I have mentioned. I do not think that that is the Government's intention. I think that they have simply found an appropriate stop point and gone no further. They could have considered the depth of the relationship that might incur additional risk to another individual.

Geoffrey Clifton-Brown: Another small point that the Minister might like to consider is that if people are not given statutory protection, but need to be protected under the sort of arrangements that my hon. Friend the Member for Beaconsfield has mentioned, the relevant police force would not be encouraged to give them protection, because witness protection tends to be expensive.

David Heath: The whole point of the protection provisions—people are given police protection and new identities now—is that various things flow from them to create stronger protection. That should be made available to those whom the police or the other services believe to be genuinely at risk—at a similar level of risk to the principal person who is to be protected under the scheme. At the moment such people are excluded by the specific references in the clause.

Caroline Flint: The debate has highlighted the complexity of human relationships; it is difficult when we must draw a line, because people will always fall on either side of it. Issues have been raised that I shall consider and we shall return to the matter later. However, I ask hon. Members to bear in mind that we are dealing with statutory provision, and it is always difficult to know where to draw a line. We live in a complicated world of complicated relationships and extended families. I agree with the hon. Member for Beaconsfield that the clause does not provide that other people should not be protected.
Vera Baird rose—

David Heath: The Minister was intervening on me, so I shall resume, but first I should love to take an intervention from the hon. and learned Lady.

Vera Baird: My intervention is really directed to the Minister. Granted that the power in clause 74 is permissive—it allows protection providers to provide  protection if they consider it appropriate—is there any real need for an associated person to be further defined? Could we not just leave the provisions so that a person associated with the person specified is entitled to be considered for protection, and leave it to the discretion of the authorities to decide whether the association is close enough to put them in danger?

David Heath: I think that the hon. and learned Lady is right. Had I not been trying to amend what the Government have proposed, I should simply have used the formula in my amendment, of someone with
''such a relationship to that person that their safety can reasonably be regarded to be at risk''.
That is the discretion that needs to be applied by the investigating and protecting authorities. They will not use their budgets for that purpose lightly and it seems odd to exclude anyone who might need that protection from consideration. 
The Minister has said that she will consider the matter again, and I do not want to prolong the debate. We have had a good exposition of some of the issues and I am grateful to the Minister for at least listening to what I have to say. On that basis, at this stage I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Amendment made: No. 33, in clause 86, page 50, line 20, at end insert— 
'(7A) A reference to a person who is or has been a member of staff of an organisation includes a reference to a person who is or has been seconded to the organisation to serve as a member of its staff.'.—[Caroline Flint.] 
Clause 86, as amended, ordered to stand part of the Bill. 
Clause 87 ordered to stand part of the Bill.

Clause 88 - Mutual assistance in freezing

Question proposed, That the clause stand part of the Bill.

Dominic Grieve: I tabled an amendment that would have deleted the clause, but that was not my purpose. I really wanted to alert the Minister to the fact that I should like an explanation about what is intended. As I understand clause 88, it puts into effect the Council framework decision 2003/577/JHA, which must be accomplished by primary legislation because it falls outside the scope of ordinary European Union directives. It deals with the execution in this country of orders freezing property or evidence. It would useful if she could outline how she expects the system to work in practice before we enact an important piece of primary legislation.

Caroline Flint: Much of our discussion has been about recognising the way in which organised crime works. It is global activity, trading and working across national borders, so we need an international approach to tackling it. The clause embraces that approach, allowing the UK to implement obligations arising from the EU framework decision on freezing property and evidence. The key objective of this EU decision is to establish the rules by which member  states recognise and execute in their respective territories freezing orders issued by the judicial authority of another member state. Such freezing is vital if property which would be liable to confiscation as the proceeds of crime is not to disappear. This is a significant example of what can be achieved through co-operation between member states, based on the principle of mutual recognition in criminal matters.
That approach was endorsed by the EU Heads of State and Heads of Government at the European Council in Tampere on 15 and 16 October 1999, assuming that competences in the decision to be recognised and acted on would always be taken in compliance with the principles of legality, subsidiarity and proportionality. The clause allows the Secretary of State, or Scottish Ministers, to implement these obligations by order under the affirmative resolution procedure, rather than by having to enact primary legislation. The power vested in the clause to create such provisions is also subject to certain qualified restrictions. We therefore envisage it enabling the UK to freeze property or assets suspected to be the proceeds of crime more quickly and with less formality than at present. Such freezing should only be a short-term and temporary measure, and must be followed up quickly by a formal request for confiscation. It is something that we and our European colleagues will gain from. I hope that that answers the hon. Gentleman's query.

Dominic Grieve: I simply raise this question as the devil always lies in the detail. I want to make it clear that I am not objecting to the Council framework decision 2003/577/JHA, but if its enactment is going to be complex, I would usually think it good for that to be done in primary legislation. The problem, as the Minister knows, is that its enactment is not simple and we have the opportunity only for a short debate on a statutory instrument. From my experience, that is when we start making mistakes. Would it not be better to have primary legislation to initiate what is quite an important piece of an international co-operation treaty that is to be enacted into British law?

Caroline Flint: The implementation of the framework decision on property that is liable to confiscation is particularly complex given our own extensive provisions in the Proceeds of Crime Act 2002 and the differing powers enjoyed by other EU member states. I fear it has not been possible to finalise our proposals in time for this Bill. Had we included any such provision, it would have considerably lengthened and complicated the entire measure. Similar consideration did not arise as regards implementation in the context of terrorist property and evidence, which was achieved in the Crime (International Co-operation) Act 2003. As I said, the affirmative resolution measure also allows for debate in Parliament.

David Heath: Will the Minister assure us that any secondary legislation will be based on full reciprocity with applicable measures of other states?

Caroline Flint: Yes.
Question put and agreed to. 
Clause 88 ordered to stand part of the Bill.

Clause 89 - Confiscation orders by magistrates' courts

Dominic Grieve: I beg to move amendment No. 216, in clause 89, page 52, line 1, leave out subsection (3).
I have a sense of déjà vu when I see the provisions of the Proceeds of Crime Act come back to haunt me. It is amusing and quite instructive to see circumstances—we shall consider them in a moment—in which it has been found necessary to tweak that legislation, despite the 36 sittings in Committee in which, I seem to recall, some of us here today participated. 
The first tweak is rather straightforward. I may have misunderstood clause 89, but I thought that it referred to variations that the Secretary of State might wish to make for confiscation order purposes in relation to part 2 of the 2002 Act and part 4 of that Act in relation to Northern Ireland. When I saw subsection (3), I was a little startled to discover that any order that the Secretary of State chooses to make could 
''amend, repeal, revoke or otherwise modify any enactment.''
That does not show much confidence on the part of the parliamentary draftsman that amending parts 2 and 4 would not have the most hideous knock-on consequences. 
As the Minister probably knows, I think it a somewhat Henrician clause. In the circumstances, I am a bit troubled by it. I should be grateful if she could explain why subsection (3) was thought necessary. It appears to give the Secretary of State extensive powers, over and above what Parliament would normally give except with very good reason.

Andrew Mitchell: I hesitate to display my ignorance to the Committee and to my hon. Friend, but will he enlighten us on what he means by a Henrician clause?

Dominic Grieve: A Henrician clause is one that has Henry VIII qualities.

David Heath: Not Henry III?

Dominic Grieve: I always thought it unfair to Henry VIII. Other monarchs would have liked such powers.
It is an extensive power, and I should like to know why it was felt necessary to include it in subsection (3).

Caroline Flint: I thought that the hon. Gentleman was going to raise again the point about the magistrates courts. He is particularly interested in that because of his experience on the Committee that considered the Proceeds of Crime Bill.
The Attorney-General and others asked us to make the clause available to make better sense and use of effecting what we wanted from the 2002 Act. I am not sure that my answer will satisfy the hon. Gentleman—I am not sure that it satisfies me—but it might be possible to restrict ''any enactment'' in clause 89(3) to the relevant parts of the 2002 Act. If necessary, I shall seek further information.

Dominic Grieve: If I understand the Minister's reply correctly, she is suggesting that it would be possible to  amend subsection (3) so that it is not quite so wide and sweeping. That is reassuring.

Caroline Flint: I have some more information. I understand that the Delegated Powers and Regulated Reform Committee in another place will be looking at all the delegated powers in the Bill, including those in clause 89(3). We will carefully consider any recommendations that the Committee makes. I am afraid that that is as clear as it is ever going to be.

Dominic Grieve: I am even more grateful for that helpful comment. It is pleasant to be reassured that it was not an attempt by some underhand method to introduce a widespread abuse of power.
The Minister does not need to persuade me of the value of making confiscation orders in the magistrates court. I have had a number of discussions with members of the Government about the matter. It was pretty apparent at an early stage that it should have been in the original legislation. To that extent, I welcome it. I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Clause 89 ordered to stand part of the Bill.

Clause 90 - Civil recovery: freezing orders

Dominic Grieve: I beg to move amendment No. 217, in clause 90, page 53, line 23, at end insert
'or 
(c) to meet his reasonable legal expenses'.

Marion Roe: With this it will be convenient to discuss amendment No. 235, in clause 90, page 56, leave out lines 3 and 4.

Dominic Grieve: I suppose that, having welcomed clause 89, I should be even more welcoming of clause 90 in its generality. When the 2002 Act first went through Committee, the possibility of having freezing orders, rather than appointing receivers, had not been entirely thought through, although it was touched on, and I remember some interesting discussions outside the formal setting of the Committee. The fact that we shall now have freezing orders strikes me as a very good thing.
The other thing that the Government are doing in the Bill, as they indicated on Second Reading, is taking the view that someone should be able to pay their legal expenses out of frozen assets if that is thought reasonable. There is a big history to this issue and it rang such a bell in my mind that I went off to dig out the Official Report of the Committee that considered the Proceeds of Crime Bill. I found that I had said the following: 
''Will you end up with a legal aid bill of £5 million for convicting Mr. Big, without any regard to the fact that the money that was restrained and recovered would have covered that amount? That is bad PR for the legal system. Will the Minister explain how the system is designed to work?''—[Official Report, Standing Committee B, 29 November 2001; c. 375.]
I might add that the Minister then explained that that was exactly what was intended and that legal aid would be made available. So, the Government's  change of heart is, I suppose, even more welcome, because it follows my original suggestion exactly. 
My query, which relates to amendment No. 217, is that I assume that legal expenses are regarded as part of reasonable living expenses. If it is the Government's intention that they are not to be seen in that way, however, should we not spell that out? On Second Reading, the then Home Secretary made it clear that that was his intention. If I have misunderstood the position, I would be grateful if somebody could clarify it for me. 
Amendment No. 235 relates to clause 90 and page 56, and they highlight something that is slightly odd. The Scottish provisions include an express provision excluding a person from taking money to meet legal expenses, which muddied the waters for me even further. I therefore tabled the two probing amendments to try to understand exactly what the Government intend.

Caroline Flint: I hope that my contribution will reassure the hon. Gentleman that amendment No. 217 is unnecessary. It would introduce an explicit provision that reasonable legal expenses will be released from the new property freezing order. It is not needed because proposed new section 245C(3) is an illustrative, not an exhaustive, list of the purposes for which exclusions may be made—''may'' being the key term. Accordingly, just because a purpose is not mentioned in the list does not mean that an exclusion cannot be made for that purpose.
One reason for not mentioning legal expenses in the illustrative list in proposed new section 245C(3) is that proposed new section 245C(5) makes it clear that the power to make exclusions includes the power to make them for the purpose of enabling a person to meet legal expenses in respect of proceedings under part 5 of the 2002 Act. Given the general terms of the power to make exclusions—I refer hon. Members to proposed new section 245C(1) and (2)—confirmation that there is power to a make an exclusion in relation to legal expenses in respect of one type of proceedings must be a sure indicator that there is power to make an exclusion in relation to legal expenses in respect of proceedings of any type. Therefore, the matter is covered. 
On amendment No. 235, we take on board the points about having access to the assets for legal expenses. As a listening Government, we sometimes learn through the implementation of law what we might not otherwise have understood. So well done to the hon. Gentleman for raising it the first time around. He will note that we are very generous on the Labour Benches. 
Amendment No. 235 would remove the prohibition, which applies only in Scotland, on releasing frozen assets to meet a respondent's legal expenses. The amendment that schedule 6 makes to the 2002 Act will allow respondents in England, Wales and Northern Ireland to control access to their frozen assets to meet their legal expenses. Scotland did not want the extension to apply to it, partly because of some of the difficulties encountered in England, Wales and Northern Ireland have not been encountered in  Scotland. For that reason, we do not propose any change. That reflects a recognition of operational experience. I am sure that the situation will continue to be monitored in Scotland but, having inquired about it, I do not believe that the measure is detrimental to our proceedings if it does not apply in Scotland.

Dominic Grieve: I am grateful for that explanation, particularly about the situation in Scotland. In view of the principles that we apply these days, we would certainly not want to impose primary legislation of this kind without the consent of the Scottish Executive and the Scottish Parliament. If that is how they want to keep matters, so be it.
I can only repeat my delight at seeing that common sense has prevailed in respect of what happens south of the border. It seemed when we introduced the original measure that it was going to bring the legal system into disrepute, and that has proved to be the case. People have complained that legal aid is being milked when both criminal and civil legal aid are being hugely squeezed while individuals have substantial assets that could be used for the purposes of their own representation. Clearly, the legal expenses have to be reasonable. In fairness to the Minister who served on that Committee, with whom I had an amicable relationship, he did express the concern that Mr. Bigs would somehow fritter away their assets as a way of preventing their seizure. His concern was legitimate, but with proper control the system that we are bringing into being is much better. I welcome it, and beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn.

Dominic Grieve: I beg to move amendment No. 234, in clause 90, page 54, leave out lines 19 to 24.
I am a bit puzzled about the restrictions on proceedings and remedies: 
''(3) If a property freezing order applies to a tenancy of any premises, no landlord or other person to whom rent is payable may exercise the right of forfeiture by peaceable re-entry in relation to the premises in respect of any failure by the tenant to comply with any term or condition of the tenancy, except with the leave of the court and subject to any terms the court may impose.''
I am conscious that in that last sentence there might be the satisfactory let-out, because of ''leave of the court''. However, it is a strange state of affairs when the consequence of a freezing order is to prevent a completely innocent third party from enforcing a completely legitimate right and obliging him instead to abide the outcome of criminal proceedings that might last a long time and at the end of which, when the assets have been seized, he is not guaranteed to be a preferential creditor of any kind. I think that that is likely to be the position, and I am therefore anxious about it. 
I appreciate that the ''leave of the court'' clause provides a possible let-out, but I am still slightly concerned that, unless I have misunderstood the position, innocent third parties could be adversely affected by such an order and could suffer serious financial loss.

Caroline Flint: This is an interesting provision. I discussed with officials a scenario in which, for  example, the person against whom a property freezing order was directed was a tenant. If that person was running a commercial enterprise—let us say a betting shop—we would want to freeze the assets to allow time to look at what was happening in that business, and so on, even though there would be a landlord. In those circumstances and others the landlord would own the building, but there might be within that property considerable assets over which the individual against whom the order had been served had control and which we would be trying to investigate.
My best explanation is, first, that proposed new section 245D of the Proceeds of Crime Act 2002 simply mirrors existing provisions in section 253 of that Act, which relate to interim receiving orders. The same issues arise in respect of new property freezing orders, so no new policy is being introduced per se. We are not trying to trample on the rights of landlords, but where a landlord wants to exercise his rights in such circumstances there must be some engagement with the court.

Tony McWalter: It seems to me that the provision is important, because those engaged in organised crime will often make quite sure that few assets stand in their name and that there is a tissue of phantom owners who own everything, from that person's car to their business premises and house, in order to ensure that the provisions of normal seizure do not apply. The provisions in the clause at least allow that network to be traced before ceding the power given by the 2002 Act.

Caroline Flint: That is a very interesting point. My example was of a landlord who had no connection with the criminal proceedings, but where the court would still have to be aware of the situation before that landlord took action that would disrupt the assets involved.
My hon. Friend raises another point. There could be circumstances in which a property freezing order is taken out against a tenant, and issues linked to the landlord arise during the investigation. I can think of examples where people own properties that are run as massage parlours but have other people running those establishments, which is a tenant-landlord relationship.

David Heath: The Minister is right in her reply to her hon. Friend the Member for Hemel Hempstead. In terms of levying distress, there is no difference in kind between subsections (3) and (1) of proposed new section 245D of the 2002 Act. Again, there is an effectively innocent party who is barred from their rightful property, cash or whatever, by the property freezing order. It would then be for the court to adjudicate on how that can be properly managed. That is a sensible provision, although I understand entirely the point that the hon. Member for Beaconsfield made.

Caroline Flint: These are all rational and sensible examples. A criminal tenant might also be in cahoots with the landlord. There might be many years to run on a tenancy, but the tenant does not pay rent so as to allow the landlord rather than the Assets Recovery  Agency to get the benefits of a long lease. There are a number of scenarios in which there needs to be protection. As I said, I discussed the issue with officials, because I did not want a property owner to be unduly frustrated or for their own affairs to be put in a difficult situation through their being caught up in a property freezing order.

Geoffrey Clifton-Brown: I draw attention to my entry in the Register of Members' Interests.
When a property freezing order takes place, the state is obviously entitled through the Proceeds of Crime Act 2002 to recover assets from a serious crime, but we are talking about the liability going forward. If a freezing order takes place and the rent is not paid for a number of years, the landlord will suffer for some while on a prospective basis rather than a retrospective basis.

Caroline Flint: As far as I understand it, if a situation arises where a landlord is not being paid rent, we are not saying that the landlord should not exercise his or her rights. We are just saying that the landlord has to notify the court in order for us to deal with that situation. In a scenario where we feel that the contents of a premises are important assets, that would give some scope for the court to engage with the landlord as to how to proceed, so that the landlord is not penalised as the innocent victim of a property freezing order.

Geoffrey Clifton-Brown: With respect, as my hon. Friend the Member for Beaconsfield read out, the Bill states:
''If a property freezing order applies to a tenancy of any premises, no landlord or other person to whom rent is payable may exercise the right of forfeiture''.
Forfeiture is not only about assets on the property, but about rent. Forfeiture can usually, and often does, involve obtaining vacant possession of the property.

Caroline Flint: Except, as the Bill says further down in that paragraph
''with the leave of the court''.
That is the point. We are not trying to deny a legitimate landlord their rights.

Vera Baird: This may be a small point, but the purpose of a property freezing order is to stop anyone from dealing with the property. Is it proposed that a land charge or some sort of caution should be registered? If the person who is subject to a freezing order tries to sell the property under the table of the freezing order, we need to be able to tell the prospective purchaser that there is a freezing order on it. The way in which that could be done would be to register a land charge or something of that kind. I do not know whether there is provision to do that.

Caroline Flint: My hon. and learned Friend makes an interesting proposal. I will look into that matter and inform the Committee.

Dominic Grieve: This has been a most useful and interesting short debate, and I am grateful to the Minister for her comments. I am certainly reassured by the fact that the leave of the court can be obtained.
A freezing order and a receiving order are not one and the same. The Government are creating freezing  orders because they are cheaper. That is the truth. Receiving orders are expensive. As I understand it, by way of background, it has been discovered in the course of the implementation of the Proceeds of Crime Act that a lot of the seizing of assets that is taking place is not so complicated that a receiver is required to be appointed. The need to appoint receivers is costing an arm and a leg, and all the assets are dissipated in the receivership. It has always been well known that receivers do better even than lawyers in terms of professional remuneration. 
In such circumstances, a freezing order is a good idea. Of course, the freezing order does just that—it freezes. A receiver at least has certain duties to manage what has been placed into receivership in ways that are compatible with the rules of law, and one can go to court to have that argued. My anxiety was that the freezing order might be a rather draconian way of dealing with the matter on a long-term basis without the rights of the landlord being properly taken into account. I appreciate entirely the point that the Minister made. If we were simply to allow landlords to have peaceful re-entry in such circumstances, there could be abuse. On that basis, and as the leave of the court can be obtained, I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Question proposed, That the clause stand part of the Bill.

David Heath: I have two brief questions. First, I presume that the freezing order will cause a delay in granting probate in the event of someone having predeceased the completion of the order. Secondly—I display my ignorance, but it may assist the Committee—does the Scottish legal term ''sist'', to be found in proposed new section 255C at page 56, line 14, mean the equivalent of ''stay'' in English or Welsh law?

Caroline Flint: The answer is yes to the latter question. On the first question, it is suggested that there might be some delay, but I shall seek a more detailed answer.
Question put and agreed to. 
Clause 90 ordered to stand part of the Bill.

Schedule 6 - Minor and consequential amendments

Amendment made: No. 57, in schedule 6, page 163, leave out lines 19 to 29.—[Caroline Flint.] 
Schedule 6, as amended, agreed to. 
Clauses 91 and 92 ordered to stand part of the Bill.

Clause 93 - Appeal in proceedings for forfeiture of cash

Dominic Grieve: I beg to move amendment No. 245, in clause 93, page 59, at end insert—
'(2A) The appeal is to be by way of a re-hearing.'. 
I tried to work out what was being changed here, and I realised that we seemed to be changing the need  to have an appeal by way of rehearing. I thought that we would put it back in, so as to find out from the Minister why it was taken out.

Caroline Flint: The reason is simply that a rehearing is not required in every case. For instance, the appeal may be on a matter of law, and we see no need for cases to be heard afresh in such situations. Also, if the Appeal Court thought it appropriate for an appeal to be by way of a rehearing, it could do so. The provision does not prevent it. It will a matter for the courts on a case-by-case basis. I accept that the Proceeds of Crime Act requires all appeals to be made by way of a rehearing, but on reflection we decided that it was unnecessary here.
The reason for the rehearing in the Proceeds of Crime Act is partly to do with the cash recovery scheme, which was closely modelled on that in the Drug Trafficking Act 1994. The chief difference in the proposed new section 299 is that it also gives the right of appeal to the prosecution. We think that that is appropriate. As with some of the other measures that we have discussed today, it is about hindsight. We are considering how things are implemented, and coming forward with a safeguarded but reasonable and practical approach to tackling such matters.

Dominic Grieve: Taking the latter point first, I appreciate that it allows the prosecution to appeal. I have no objection to that. I have to say that when I read the original section, I did not notice that the prosecution did not have a right of appeal. However, perhaps unintentionally the drafting does not seem to provide for that. It shows that even the 36 sittings in Committee and in the House of Lords scrutinising that Bill may not have done the job intended.
The Crown court is capable of dealing with points of law, and not appeals by way of rehearing. However, the Minister will be aware that appeals in the Crown court generally take place by way of rehearing of the facts as well as submissions of law. As long as there is the possibility for an entire rehearing, I am content. What concerned me was the possibility that the process would exclude that. On the basis of the Minister's reassurance that that is not the case, I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Clause 93 ordered to stand part of the Bill.

Clause 94 - Money laundering: defence where overseas conduct is legal under local law

Dominic Grieve: I beg to move amendment No. 246, in clause 94, page 59, line 27, after 'territory', insert 'at the time it occurred'.

Marion Roe: With this it will be convenient to take the following: amendment No. 247, in clause 94, page 59, line 40, after 'territory', insert 'at the time it occurred'.
No. 236, in clause 94, page 59, line 40, leave out from 'territory' to end of line 42. 
No. 248, in clause 94, page 60, line 10, after 'territory', insert 'at the time it occurred'. 
No. 237, in clause 94, page 60, line 10, leave out from 'territory' to end of line 12. 
No. 249, in clause 94, page 60, line 23, after 'territory', insert 'at the time it occurred'. 
No. 238, in clause 94, page 60, line 23, leave out from 'territory' to end of line 25. 
No. 239, in clause 94, page 60, line 34, leave out from 'territory' to end of line 36. 
No. 250, clause 94, page 60, line 45, after 'territory', insert 'at the time it occurred'. 
No. 240, in clause 94, page 60, line 45, leave out from 'territory' to end of line 2 in page 61.

Dominic Grieve: There are two issues. I have already satisfied myself that my amendment on one of them is a bad point, for which I apologise in advance, but at least I will get an answer from the Minister and her advisers rather than my own research on the matter.
I preface my remarks by saying that I am delighted that the Government have addressed what might have been a real howler in the Proceeds of Crime Act 2002. It was explained to me a little time ago when I attended a seminar on the subject conducted by a colleague at the chancery Bar, who sent me some very useful information on the subject. A potential consequence of the way in which the Act had been drafted was that if one carried out in a foreign country an act that was perfectly legal there but that was illegal in England and Wales and from which one made a profit, one would fall within the relevant definition and could be accused of laundering money. 
For example, someone importing into Scotland and making a profit from bourbon whisky that had not been made in compliance with the various pieces of whisky legislation in Scotland, would, as I understand the Proceeds of Crime Act, fall into the category of being a money launderer and making a profit that could be seized. Clearly, that was not what Parliament intended. 
I therefore welcome clause 94, which, as I understand it, is there to make it crystal clear that someone who carries out an activity that may be relevant criminal conduct in the United Kingdom but is not relevant conduct in the country in which it was carried out cannot fall into the category of money laundering. However, I was concerned that after the words 
''is not unlawful under the criminal law of that country or territory'',
the clause did not contain the words in my amendment, 
''at the time it occurred''.
That is because the time at which the matter is being considered in the UK may well be different from the time at which the property was acquired in the foreign country or the profit made. 
I am reassured by the fact that there appear to be dicta in the Pinochet case that one should consider the act at the time at which it occurred. Perhaps the  Minister will confirm that. I might therefore be worrying about nothing, but I did wonder whether, despite the Pinochet case, my amendment might not clarify what could otherwise lead to a misunderstanding. It must surely be right that if the conduct was lawful at the time at which it occurred, even if it has subsequently been made unlawful in the foreign country, it should not place the person in the category of criminal conduct in the UK. That is the point that I am trying to make in a series of amendments. I do not need to run through them as I have gone through the entire clause and amended it in one place after another. The lead amendment defines the remaining ones. 
The second amendment probes the fact that it appears that provision will still be made under the clause for certain offences or activities prescribed by an order made by the Secretary of State to remain criminal conduct. Assets can therefore still be seized in the UK even if the conduct took place abroad at a time when it was not a criminal offence there. There may be good reasons for the subsection. One can think of some of them quite quickly. One example, I suppose, is slavery. There may be no countries in the world where slavery is legal, although, unfortunately, slavery certainly exists in a number of countries and appears to be semi-legal and approved of by the Government there. However, if we were discussing the laundering or acquisition of money derived from slavery, it even if it were lawful in the country where it took place, there would be good grounds for the Secretary of State to prescribe that the profits and assets derived from it should be seized in this country. 
However, it would be useful to hear from the Minister whether she has a list and how she envisages such matters being dealt with. Clearly, we do not want to close one door only for the Home Secretary to publish an enormous list putting all the offences back in again, although I am sure that he would not do that. I would be very grateful if the Minister dealt with that point, too. That, in fact, ends my remarks on all the amendments, which relate to the two specific points that go through the entire clause.

David Heath: I simply want to add a sentence or two to the hon. Gentleman's comments. I was slightly reassured to find that the Secretary of State's order could specify certain offences, because some states and territories do not conform to recognised norms of jurisprudence and it is not unreasonable that we should have some regard to that in formulating our own laws. It would be helpful if the Minister gave some indication of the schedule of crimes that she envisages the Secretary of State setting out for the purposes of the clause.

Caroline Flint: At the outset, let me thank the taskforce that assists me in listening not only to the financial industry, but to accountants, lawyers, the Law Society and others. On this and other parts of the Bill, it has very much helped me and my officials in understanding the issues that have affected those groups as a result of the Proceeds of Crime Act. We try to ensure that we listen and we are trying to improve the position. The present provisions are one point at which we have tried to make improvements  following the extensive discussions that were held first time round.
Under our proposal, the Secretary of State will have powers to prescribe by order specific types of offence that, although not criminal offences in the country concerned, would constitute serious crimes if committed in this country. Our problem with the amendments tabled by the hon. Member for Beaconsfield is that they could open up major loopholes in our defences against not only money laundering, but activities in which all of us would consider it completely unacceptable for the UK to be used as a source of assistance—he gave the example of slavery. 
Such cases, as well as being serious, can generate significant criminal profits. We therefore think it right that they be regarded as money laundering offences and that the regulated sector should continue to have an obligation to report them to the National Criminal Intelligence Service. For example, we would expect to include in the order the corruption offences listed in section 109(3) of the Anti-terrorism, Crime and Security Act 2001. Requirements to report money laundering in respect of such offences are also imposed by the United Nations convention against corruption. Furthermore, article 7 of the Organisation for Economic Co-operation and Development convention on combating bribery of foreign public officials in international business transactions provides that 
''Each Party which has made bribery of its own public official a predicate offence for the purpose of the application of its money laundering legislation shall do so on the same terms for the bribery of a foreign public official, without regard to the place where the bribery occurred.''
There will be other serious offences, which might not be criminal offences in the country abroad but which also need to be excluded from the proposed defence and to be included in the order. They include, for example, paedophilia, drug cultivation and the trafficking of people. We shall consult law enforcement bodies and others on the offences that should be included in the order, and they will, as I said, be serious offences. If amendments Nos. 236 to 240 were made, there would be no obligation on the financial sector to report some of those serious offences. We do not want to have to give any of those people free rein to launder in this country the proceeds from those countries where their activities are not classified as criminal offences. 
The main purpose of clause 94 is to filter out the need for the regulated sector to report activities such as, for example, the profit from bullfighting in Spain—whether one is for or against it—or companies engaging in what is apparently lawful business abroad. Switzerland, for example, does not have such a detailed system for regulating financial markets as the UK under the Financial Services and Markets Act 2000. As the regulated sector in the UK has impressed on us, we do not want to create a situation in which business transactions cannot happen within the UK and therefore affect jobs in our economy. 
With regard to amendments Nos. 246 to 250, the duty to disclose money laundering arises only if the conduct will amount to an offence if committed here. We are not concerned with acts that are not unlawful in this country. I hope that it is clear from the present tense in the clause that the test is to be applied with reference to the law of the country at the time when the disclosure falls to be made. In that respect the test is the same as that relating to the offences to be listed in the order by the Secretary of State. I hope that that answers the question about the date.

David Heath: May I test the Minister on one other relevant issue? In a country with federal jurisdictions, presumably the offence has to be an offence in the part of that country in which it took place. In federal jurisdictions—even in our own jurisdiction—there are widely different definitions of offences. Is there any ambiguity in the clause as drafted in respect of that situation?

Caroline Flint: I shall check to ensure that there is no misunderstanding and clarify it for the hon. Gentleman. I take his point about different jurisdictions and laws in different parts of a federal state. The United States of America, for example, has state law as well as federal law.

Dominic Grieve: May I return to the time of disclosure? I understand the Minister's point, but it raises a question. It means that a person in this country would have to disclose a transaction that appeared to be unlawful at the date on which he makes the disclosure because it was unlawful in the country where it took place at that date, even though he may know very well that on the date that the transaction took place in that other country, it was lawful. There is a question mark about that because it is a rather convoluted state of affairs. I shall let the Minister respond and then I might address the Committee further on the point.

Caroline Flint: With the hon. Gentleman's agreement, I shall consider whether there should be some provision so that lawfulness is tested at the time when the conduct took place. I hope that that answers part of his question and that it is clear for everyone concerned that the reference to the law of the country at the time should be when the disclosure falls to be made. I will consider what the hon. Gentleman said and see whether there is a simpler way to clarify what we are trying to do.

Dominic Grieve: I am grateful to the Minister, but laws change. To illustrate my point, mink fur farming in this country was lawful until a date when it became unlawful. Let us imagine that a person makes a legitimate profit from fur farming in a foreign country and one day the Government of that country pass an Act prohibiting it. At a later stage, an accountant in London who is examining a client's records notes that the client has made a whacking profit from fur farming, which is illegal at that date both in this country and in the foreign country where the fur farming took place. However, he knows that the profit was made at a time when fur farming in the foreign country was lawful. Must he make a disclosure in those circumstances?

Caroline Flint: Let me reassure the hon. Gentleman. Incidentally, there was a fur farm in my constituency. I am not in favour of fur farming, but I do not think that the example given by the hon. Gentleman would be on any order that we dealt with.

Dominic Grieve: The example might be unfortunate, but the money laundering provisions of the Proceeds of Crime Act 2002 go far and wide. All unlawful activities of a huge variety of kinds are caught by it. It is about funny money—money that has been made in an unlawful fashion. There may be times when money can be lawfully made from something abroad, but then there comes an Act in that foreign country and the activity becomes unlawful. If the date of disclosure is key, we shall be asking accountants and others to make disclosures about activities that they know perfectly well from looking at the records before them were perfectly lawful when the money was being generated in the foreign country.
That seems slightly odd, although the Minister could argue that it is better that a disclosure be made in those circumstances and the authorities will then decide whether further action need be taken. I think that there is an issue in this respect, however, and I am grateful to the Minister for saying that she will go away and think about it a little further. It seemed to me that if we adopted my amendment, which was designed to highlight the issue, it would solve the problem or at least go quite a long way towards solving it. I do not see a huge downside to it, but I accept that if the current rules are ''unlawful at the date of disclosure'', my amendment would drive something of a coach and horses through that. I await with interest the Minister's comments. 
The Minister has reassured me on the other point, and I look forward to seeing in due course the list that the Home Secretary produces. I simply make this point, which I think from her own comments the Minister already appreciates: even though we may dislike activities in some foreign countries, we create a strange situation if, except for a very restricted number of offences, which I describe as having an international characteristic, we impose penalties on individuals who carry out lawful activities in foreign countries. It is important that we do not end up with such people potentially having their assets investigated or seized and with accountants having to make disclosures in that respect. I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Question proposed, That the clause stand part of the Bill.

Jonathan Djanogly: Every business man and professional will have come into contact with the money laundering regulations. I certainly have as a solicitor, although I note that solicitors are responsible for only some 9 per cent. of reports to NCIS. The provisions therefore affect a large proportion of people conducting business. I call for balance and proportionality. I accept, of course, that money laundering regulations are important in the fight against international crime. I also appreciate that these provisions are aimed at  smoothing some of the rougher edges that have appeared out of the Proceeds of Crime Act 2002, but I do not feel that they go far enough. To that extent, I support the thrust of the amendments proposed by my hon. Friend the Member for Beaconsfield. This area needs to be kept under review. I was pleased to hear the Minister say that she has been consulting and listening to those affected. The Government need to continue to do so.
What is the problem that we have? I was talking recently to the managing—we will call it company X—who purchased another company. Company X considered that there was a breach of contract in its purchase agreement on the acquisition and brought a warranty claim against the sellers. The lawyers for company X insisted to the managing director that the sellers should be reported to NCIS for possible breaches of the Proceeds of Crime Act, even though no crime had been seen and there was no evidence that a crime had been committed. 
The managing director of company X wanted to settle the matter—he was a business man and wanted to move on, but he was unable to do so because his own professionals were telling him that they had to report the case to the NCIS. That was a situation in which no crime was suggested, and it arose simply because the professionals acting for the company sensed a bad smell in what they found. The implications of not reporting the matter are so tough in this country that even though those professionals did not see any kind of offence, they did not want to take the risk. One might think, so what? The problem is that an innocent party suffered delay and loss of money and is now less likely to want to conduct business in this country. 
We need to start to put this matter in proportion, because it is a significant issue for business in the UK. So far, 150,000 reports have been made under the legislation. In the same period, eight reports were made in Germany, and 50 in France. We need to appreciate that the legislation is disrupting business in the UK—for both business men and professionals—in a way in which it does not in other European countries. It is estimated that compliance costs related to the legislation have reached £100 million. We once again see examples of the UK gold-plating and heavily reinforcing regulations, some of which come out of Europe, at the expense of our compliant and honest business people.

Tony McWalter: Does the hon. Gentleman accept that British companies often get a significant amount of business from a reputation for probity and honesty, precisely because there is a regime in place that gives people confidence in the honesty of their operations?

Jonathan Djanogly: Of that I have no doubt. I would not want the hon. Gentleman to think that I was talking about a total dismissal of the Proceeds of Crime Act—I am not. I am, however, saying that the Government need to review the position. There is a growing number of complaints that the way in which the legislation works is not cost-effective and is over-inhibitive of business. I should be grateful if the Minister would give her opinion on that important aspect.

Caroline Flint: The provisions have come under consultation with the regulated sector. We are trying to find a way to show that we are listening to that sector's concerns, but we are working in a new area. It is clear from the amendments that the Conservatives feel the threshold is too low. That is one of the reasons why we have left a great deal of flexibility in the Bill for individual arrangements to be made between NCIS and the institutions to vary the amounts on a case-by-case basis. At this stage, we feel that to set a general threshold above £100 would be too high; we are concerned that that could allow for substantial evasion of the principal money laundering offences in sections 327 and 329 of the Proceeds of Crime Act.
As I have said, we believe that the current proposals in clause 95 are flexible. They allow the Secretary of State to vary the £100 threshold amount by order, if experience proves that that might be necessary. We keep such issues under constant review, through the taskforce, through representations from those who assist us in this work and through listening to those involved in law enforcement. [Interruption.] 
I have just been told that I might be speaking to the wrong part of the Bill. We are debating clause 94 stand part, I apologise. I was doing so well. [Laughter.] 
I am back. I was jumping ahead. As I said before, we are trying to create a sensible procedure that ensures that Britain sets an example and encourages other countries to do so too. We have shown, through this clause, that we have been listening to the concerns of industry. I hope that, despite everything that the hon. Member for Huntingdon says, we can agree clause 94. I apologise for the misunderstanding. 
Question put and agreed to. 
Clause 94 ordered to stand part of the Bill.

Clause 95 - Money laundering: threshold amounts

Dominic Grieve: I beg to move amendment No. 241, in clause 95, page 61, line 34, leave out '£100' and insert '£500'.

Marion Roe: With this it will be convenient to consider the following amendments: No. 242, in clause 95, page 61, line 34, leave out '£100' and insert '£1,000'.
No. 243, in clause 95, page 61, line 34, leave out '£100' and insert '£250' 
No 244, in clause 95, page 61, line 34, leave out '£100' and insert '£5,000'.

Dominic Grieve: This part of clause 95 concerns threshold amounts. Sensibly, the Government have taken the view that there should be a de minimis provision in respect of the duty to make a disclosure. In those circumstances, we are told:
''The threshold amount for acts done by a deposit-taking body in operating an account is £100 unless a higher amount is specified under the following provisions of this section (in which event it is that higher amount).''
The Committee will see that the amendments offer some alternatives to £100—£500, £1,000, £250 and £5,000. While there is a probing aspect to those  alternatives, £100 is a small amount, and I am bound to say that if the provision is going to be that low, that might be a compelling reason to say that every penny has to be accounted for and disclosed by the accounting bank. However, if we are going to have a real de minimis provision, accepting that some transactions will slip through, but aiming to lessen the burden on deposit-taking bodies and, I suspect, on those to whom the reports are to be made, £500 or £1,000 might be more appropriate, even if 5,000 is probably too high. 
I hope that the Minister will also take the opportunity to explain what is meant by the 
''higher amount . . . specified under the following provisions of this section''
and the circumstances in which higher amounts will be deemed appropriate.

Jonathan Djanogly: I support my hon. Friend's argument—£100 seems an extremely low figure. My thought process led me to think that perhaps a criminal might have lots of £100 accounts and, therefore, that £100 is the right amount. However, I do not think that that is right, because if he had a lot of accounts, that would create a bad smell that would lead banks to suspect money laundering. That takes me back to the thought that £100 is too low, so I support the amendment.

Andrew Mitchell: I, too, wish to say a few words on the three amendments, particularly about the figures. Two important points need to be made.
I was able to raise the first on Second Reading of some money laundering legislation some years ago. I pointed out that it was right to impose such low limits if it met a particular difficulty that could at least be defined in some credible way. Clearly, however, those low limits are a burden not only to the financial community and for those engaged in retail financial services; they are also a considerable burden to those opening accounts, who have to produce the necessary documentation and so forth. Parliament should impose such burdens only if it is really necessary. 
That brings me to my second point. I asked Ministers on that Second Reading whether they could give the House some idea of their perception of how bad money laundering was in Britain. I wanted to know whether it was an enormous problem or a minor one. I wanted to know whether the Government could quantify the scale of money laundering to which they believed Britain was being subjected. Was London the money laundering capital of the world? What satisfaction could Ministers give Parliament that we were justified in imposing those substantial burdens, given the effects that I have described? Was the problem extremely severe? I did not receive an answer on that occasion, nor on any other occasion since. 
In supporting the amendments, I want to probe the Minister a little further. I hope that she will be able to demonstrate to the frustrated public who have to meet those low thresholds when opening accounts, and to the financial community, that they really are necessary.

Caroline Flint: As I said earlier, we understand the difficulties caused by the present arrangements. Based on a strict interpretation of the law, a bank would need to make a separate disclosure to NCIS, or seek consent from it, before processing any transaction in such cases. I believe that the provisions in clause 95 take us some steps forward by recognising what is necessary in those different circumstances.
As I understand it, the £100 threshold was based on advice from NCIS, which is obviously the service that deals with organised crime. The financial crime unit is part of that organisation, which will transfer to SOCA once it is established.

Andrew Mitchell: I want to pin the Minister down very precisely, not least because the words ''we are advised by the Security Service''—or by the Secret Intelligence Service or whomever—will, I suspect, be used in other debates next Tuesday. Will she tell us not that she is advised, but that NCIS—or whichever service she is referring to—has specifically given that advice about that amount of money?

Caroline Flint: My understanding, based on consultation, is that that is the case. I shall verify that. Alongside that, the Bill makes provision to ensure, on a case-by-case basis, that NICS has the power to vary the amounts within organisations or institutions. That would apply to mortgage payments, allowing a higher threshold to be set, for example.
Clause 95 gives the Secretary of State the ability to vary the £100 threshold. We are monitoring the situation, but the clause gives us the flexibility to adjust the £100 threshold if we feel that it is appropriate in the light of experience. As I said, the provision already allows NCIS or other law enforcement agencies to set a higher threshold in particular cases. Alternatively, banks can ask for a higher threshold, and the threshold amount can subsequently be varied. The threshold can therefore be different for different transactions—for instance, it can allow for the fact that mortgage payments are usually considerably higher than the other payments that people usually have to make. 
Clause 95 allows us to take a few steps forward in an area that everyone agrees is important. We must get the balance right, making sure on the one hand that we do not lose out on important information but on the other hand that we do not end up tying people down too tightly. There are opportunities for variations within the clause. We will continue to review the situation and take advice from all sides about how this is operated and whether it produces the evidence and intelligence that we need to deal with particular activities that may involve crime.

Dominic Grieve: I am slightly tempted to put one of the amendments to the vote, but I will restrain myself. I accept that it is a hit and miss operation, but I have a feeling that £100 is too little. If the Government really want £100, I do not know why they have a de minimis figure at all. I would have been more comfortable had the Minister accepted £500 or even £1,000 as being a reasonable figure. I have listened carefully to what she said. I am pleased that the figures will be kept under review. There may be further opportunities to discuss  this later in the Bill. I do not think that the Minister's reply is wholly satisfactory but I hope that she succeeds in finding a minimum figure that works. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Clause 95 ordered to stand part of the Bill. 
Clauses 96 and 97 ordered to stand part of the Bill.

Clause 98 - Money laundering: miscellaneous amendments

Question proposed, That the clause stand part of the Bill.

Marion Roe: With this it will be convenient to consider new clause 24—Tipping off—
'(1) In the Proceeds of Crime Act 2002, section 333 is amended as follows. 
(2) In subsection (1)(a) after ''has been made'', insert ''or knows that such a disclosure is going to be made''.'.

Dominic Grieve: Clause 98 provides for an offence of tipping off, but does not provide for circumstances in which tipping off takes place immediately prior to the disclosure being made. The intention of the new clause is to beef up the provisions and to make it an offence to tip off, not only where a disclosure has been made, but where the person knows that such a disclosure is going to be made. I would have been quite comfortable to reinforce the structure of the Proceeds of Crime Act 2002. Otherwise, the offence is a slightly different one from tipping off. Tipping off is either knowing or believing that a disclosure is going to be made. Here, one commits the offence only if one knew that a disclosure was about to happen. I should be interested to hear the Minister's response on that point and the comments that I thought she was about to make about clause 98.

Caroline Flint: At present, the tipping off offence is in respect of disclosures about money laundering that have already been made to NCIS. We have not had sufficient time to consider the new clause fully. I should like to get the views of NCIS and law enforcement on this matter. I would also want to ensure that the amendment would not tighten the tipping off offence in a way that was unacceptable. For example, a solicitor acting for a wife in divorce proceedings might feel professionally obliged to warn her that, as a result of what she told him about her husband's finances, he would need to make a disclosure and seek consent from NCIS under section 328 of the Proceeds of Crime Act 2002 if he continued to act for her. Such a warning might constitute tipping off under the new clause if, as a result of him telling the client, a subsequent criminal investigation is likely to be prejudiced. We need to consider the implications, and I would like to report back later, but the hon. Gentleman has raised issues that give us pause for thought.
Clause 98 is a tidying-up clause that addresses an anomaly identified by the legal and accountancy professions. Under the Proceeds of Crime Act 2002, a professional legal adviser advising a client is not obliged to disclose to NCIS information that they obtain from the client in privileged circumstances. The  definition of privileged circumstances does not cover the case in which a professional adviser passes to his nominated officer information that he has received in privileged circumstances. Passing the information would constitute disclosure and trigger the nominated officer's duty to tell NCIS. That would put a professional adviser in a dilemma of whether not to disclose to NCIS and risk a breach of the reporting requirements, or to disclose and risk a breach of professional privilege or other confidence intended to be protected. Clause 98 amends the Act so that the nominated officer is not obliged to disclose to NCIS when the professional legal adviser seeks advise for him on whether the facts known to him give rise to the need for a disclosure. 
With that explanation and with what I have said about the hon. Gentleman's new clause, I hope that he will not press it and that the Committee will approve the clause.

Dominic Grieve: On the latter point, I am grateful to the Minister for clarifying what the clause is intended to achieve. It is undoubtedly necessary and important, and I am grateful to the Government for considering the matter and accepting representations on it from various professions.
My new clause was probably taken with this clause stand part debate because it is the only place that it can be taken, but they do not marry together particularly well. I understand the Minister's point perfectly. It was not my intention to criminalise the solicitor in the circumstances that she described. I was concerned about a situation in which it is known in an office that an employee has decided to make a disclosure the following day about a client, but prior to the disclosure taking place, another person in the office tips off the client. That was the circumstance that interested me and that we could try to catch with my new clause if we so wanted. However, as always, there is a law of unintended consequences with the drafting of all legislation, and it may be that what I proposed is unworkable. 
Question put and agreed to. 
Clause 98 ordered to stand part of the Bill.

Clause 99 - Money laundering offences

Amendment made: No. 34, in clause 99, page 66, line 27, at end insert— 
'( ) In section 398 (meaning of customer information: Scotland) in subsection (5)— 
(a) after paragraph (a) insert— 
''(aa) constitutes an offence specified in section 415(1A) of this Act,''; 
(b) in paragraph (b) after ''paragraph (a)'' insert''or (aa)''.'.—[Caroline Flint.] 
Clause 99, as amended, ordered to stand part of the Bill.

Clause 100 - International co-operation

Amendment made: No. 35, in clause 100, page 66, line 39, leave out 
'In section 447(3) of the Proceeds of Crime Act 2002'
and insert— 
'( ) Part 11 of the Proceeds of Crime Act 2002 (c. 29) (co-operation) is amended as follows. 
( ) In section 444 (external requests and orders), for subsection (3)(a) (Order under the section may include provision about the functions of the Secretary of State, the Lord Advocate, the Scottish Ministers and the Director of the Assets Recovery Agency) substitute— 
''(a) provision about the functions of any of the listed persons in relation to external requests and orders;''. 
( ) In that section, after subsection (3) insert— 
''(4) For the purposes of subsection (3)(a) ''the listed persons'' are— 
(a) the Secretary of State; 
(b) the Lord Advocate; 
(c) the Scottish Ministers; 
(d) the Director; 
(e) the Director of Public Prosecutions; 
(f) the Director of Public Prosecutions for Northern Ireland; 
(g) the Director of the Serious Fraud Office; and 
(h) the Director of Revenue and Customs Prosecutions.'' 
( ) In section 447(3)'.—[Caroline Flint.] 
Question proposed, That the clause, as amended, stand part of the Bill.

Paul Farrelly: Just before we leave part 2 and the Government amendment, I wanted to mention that one capability is omitted from part 2 that has played a vital role in dismantling organised crime syndicates around the world, not least the Mafia in the United States. It is the power to use wire-tap evidence in court. I do not want to detain the Committee, but I do not know whether legislation is needed for wire-tap evidence to be admissible in court. Could the Minister pay some serious attention to that and perhaps write to me?

Andrew Mitchell: If the hon. Gentleman looks carefully, he will find new clause 12. It is a permissive clause that seeks to do precisely what he suggests, but we have not yet reached that point in the Bill. If he can contain himself until Tuesday morning, he may have the opportunity to enter into a most interesting debate.

Paul Farrelly: I am grateful to the hon. Gentleman. I shall contain myself and will not ask the Minister to write to me on that matter at the moment.
Question put and agreed to. 
Clause 100, as amended, ordered to stand part of the Bill. 
Further consideration adjourned.—[Mr. Heppell.] 
Adjourned accordingly at one minute past Five o'clock till Tuesday 18 January at ten minutes past Nine o'clock.